- The natural disaster prevention fund
Natural disaster prevention fund is a State off-budget financial fund including the Central-level natural disaster prevention fund managed by the Ministry of Agriculture & Rural Development and the Provincial-level natural disaster prevention fund managed by the provincial People’s Committees. The Fund’s financial resources are compulsorily contributed by domestic and foreign economic organisations in the locality, Vietnamese citizens from full 18 years old to retirement age under normal working conditions as prescribed by labour law[1]. Accordingly, domestic, and foreign economic organisations in the locality and individuals as prescribed by law are obliged to contribute to the Fund[2].
2. Contribution rate to the Fund
2.1 For domestic and foreign economic organisations:
The compulsory annual contribution rate is 2/10,000 of the value of the total assets in Vietnam based on the annual financial statements, but a minimum of VND500,000 and a maximum of 100,000,000, and this contribution can be entered into the accounts of the expenses for the organisation’s production and business[3]
2.2 For the Employee in the enterprise:.
The Employee’s contribution rate is 01 day’s salary/person/year based on the regional minimum wage at the time of contribution[4]. Regarding this contribution, unless otherwise agreed, the Employer needs to notify the Employee the Employee’ contribution will be directly deducted from the Employee’s monthly salary and shall be paid by the Employer. In particular, the daily salary for 01 working days in case labour contract stipulates monthly salary, the daily salary will be determined by dividing the monthly salary by the usual number of working days in accordance with the law that the enterprise has chosen. In case the labour contract has recorded agreement on a weekly salary, the daily salary will be determined by dividing the weekly salary by the number of working days per week as agreed in the labour contract[5].
Therefore, the Employer needs to refer to the actual number of working days in the month when the Employee’ salary is expected to be appropriated (the total days of the calendar month – weekly days off as prescribed in the labour contract or the registered ILR) to determine the Employee’s rate of contribution to the Fund and then implement the appropriation accordingly.
3. The cases where the contribution to the Fund may be exempted, reduced, or suspended[6]
- War invalids, diseased soldiers and those who are eligible for the policy applicable to war invalids
- Biological parents, spouses of martyrs:
- Military personnel serving in military forces, non-commissioned officers, public security forces working in the police office with definite terms who are entitled to cost-of-living allowances:
- Students and pupils who are following full-time and long-term education programs in Universities, Colleges, High Schools, Vocational Schools;
- People with disabilities or a decrease in working capacity from 21% and above; people with fatal diseases certified by a district-level or higher-level hospital;
- People who are in the period of unemployment or have not been employed for 06 months or more in a year;
- Members of households in the category of poverty or near-poverty; members of households in are severely damaged by natural disasters, epidemics, fires explosions, or accidents; members of households in extreme difficulty communes in coastal areas, islands, region III communes belong to ethnic minority and mountainous areas; social protection subjects who are entitled to the monthly social allowance under decisions of the Prime Minister, Governmental Decree and documents amending and supplementing the above documents (if any);
- Cooperatives with no revenues; and
- Domestic and foreign economic organisations which have their assets, factories or equipment damaged by natural disasters in the year; which must make repairs or purchases with a value of over 2/10,000 of the total value of assets, or shall suspend business, production activities for 05 days or more.
3.2 Subjects eligible for reduction or suspension of Fund contributions include:
Domestic and foreign economic organisations which are entitled to CIT exemption or reduction will be considered for Fund contribution reduction or suspension.
3.3 Subjects eligible for reduction or suspension of Fund contributions including:
An independent-accounting economic organisation eligible for CIT exemption or reduction may be considered for Fund contribution reduction or suspension.
[1] Article 7.1 Law on Amendments to the Law on natural disaster management and Law on dikes 2020
[2] Article 15 Decree 94/2014/ND-CP dated 17/10/2014 and Article 2 Decree 83/2019/ND-CP dated 12 November 2019
[3] Article 5.1 Decree 94/2014/ND-CP dated 17 October 2014
[4]Article 5.2 (b) Decree 94/2014/ND-CP dated 17 October 2014
[5] Article 54.1 (a3) Decree 145/2020/ND-CP dated 14 December 2020
[6] Article 6 Decree 94/2014/ND-CP dated 17 October 2014 and Article 1.2 Decree 83/2019/ND-CP dated 12 November 2019
